Fake LoUs: PNB agrees to honour Rs 65 bn of other banks’ pending claims
Punjab National Bank (PNB) on Wednesday decided to clear all other banks’ dues, amounting to Rs 65 billion, to be paid before March 31 in relation to the Rs 140-billion fraud case. “The board of PNB, in a meeting held on Wednesday, has approved payment related to letters of undertaking (LoUs) and foreign letters of credit (FLCs) issued by the bank which mature on or before March 31, 2018,” PNB said in a statement. The decision will help the bank settle claims worth Rs 65 billion against LoUs issued to seven banks — Union Bank of India, Allahabad Bank, Bank of India, Canara Bank, State Bank of India (SBI), Axis Bank, and UCO Bank.
Sebi accepts most Kotak panel proposals, splits CMD post & slashes MF charges
The Securities and Exchange Board of India (Sebi) approved sweeping changes proposed by the Uday Kotak panel on improving corporate governance standards such as splitting the post of chairman and managing director, tighter rules for independent directors, enhanced disclosure of related-party transactions and mandatory secretarial audits for listed entities and their material subsidiaries. “Out of 80 odd recommendations (of the Kotak panel), 40 were accepted without modification, 15 with modifications, eight were referred to government and other departments,” Sebi chairman Ajay Tyagi told reporters after the board meeting on Wednesday.
RBI rolls out regulations for cross-border mergers
India has rolled out the long-awaited regulations to allow cross-border mergers and amalgamation that could boost foreign direct investment into the country. The Reserve Bank of India (RBI) has framed the regulations for mergers amalgamation and arrangement between Indian and foreign companies. The Foreign Exchange Management (Cross Border Merger) Regulations, 2018, will cover both inbound and outbound investments. The ministry of corporate affairs had already notified Section 234 of the Companies Act, 2013, paving the way for merger and amalgamation of a foreign company with an Indian company and vice-versa.
Videocon loan: ICICI Bank board backs Chanda Kochhar
The board of ICICI Bank on Wednesday defended its management after a review of the bank’s internal processes for credit approval in general and its exposure to the Videocon group in particular, saying it “expresses and reposes full faith and confidence” in managing director and chief executive officer Chanda Kochhar. The statement is important in the light of recent reports that ICICI Bank’s lending to some of its clients may not have been prudential. The board observed that the process of credit approval at the bank is such that no individual employee would be in a position to influence credit decisions there. Multiple independent departments are involved in providing independent credit risk rating, doing credit appraisal, credit approvals and monitoring the proposals.
RBI to banks: Audit SWIFT transactions by June 30
The Reserve Bank of India (RBI) has directed all scheduled commercial banks to audit their SWIFT interbank transactions by as early as June 30 to detect any anomaly or fraud, a top official told FE. The directive is part of the RBI’s efforts to crack down on any manipulation or abuse of the SWIFT system elsewhere, beyond Punjab National Bank (PNB) that is reeling in a crisis in the aftermath of a $2-billion fraud there. The central bank, under attack over its supervisory framework following the fraud, has already directed all banks to link SWIFT with their core banking solution (CBS) by April 30 and prevent such frauds from recurring in future. “This directive (to audit SWIFT transactions) is mandatory for banks to comply with, and not an advisory that can be avoided with some pretext,” stressed the source.
Sebi may ease some compliance norms for firms under bankruptcy
The Securities and Exchange Board of India (Sebi) has proposed to ease compliance norms for companies undergoing resolution under the Insolvency and Bankruptcy Code (IBC) framework. The regulator is going to release a discussion paper that will examine whether there should be trading restrictions on such companies. It will also examine whether to allow restructured companies to get their promoter shareholding to 75% within one year. Sebi norms for regularly listed firms mandate that 25% of shares are held by the public. “Since there is no board, all Sebi norm compliances will come to the Resolution Professional. The question of whether the trading should be restricted or not. So consultation is needed. We are trying to be cautious,” said Sebi chairman Ajay Tyagi.
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